Michigan Sugar Co. investing $65 million in Bay City factory

Michigan Sugar Company is investing more than $65 million to build a plant that squeezes millions of pounds more sugar from the molasses created when sugar beets are processed.

Company officials announced the new “desugarization facility in an outdoor ceremony on Tues., Aug. 24.

Mark S. Flegenheimer, Michigan Sugar President & CEO, says desugarization is removing sugar from molasses. Molasses is created when sugar is extracted from the beets.

Since the 1990s, Michigan Sugar has been able to extract sugar from about 325 tons of molasses a day. That represents about 60% of the molasses created at Michigan Sugar’s four plants. The new desugarization plant doubles the capacity to 650 tons a day. That represents 100% of the molasses created at all four plants.

Construction is expected to begin this fall at the 2600 S. Euclid Ave. property. The new, 22,000-square-foot facility should be up and running in 18 to 24 months.

The economic impact of the expansion is significant.

“At the end of the day, this investment of $65 million plus is going to return $10 to $15 million back to our shareholders,” Flegenheimer says.

“We’ve been around for over 100 years and investments like today allow us to exist for another 100 years. It’s bold investments like this that are required when you’re looking into the future. A lot of the gentlemen who are on our board, they tell you, we don’t make this investment for ourselves. We make this for the next generation.”

It’s the latest in a series of successful steps, Flegenheimer says.

Michigan Sugar was founded in 1906.  Today, it includes four processing facilities in Bay City, Caro, Croswell, and Sebewaing. It was warehouse facilities in Michigan and Ohio and sugar beet piling stations in Michigan and Ontario.

Michigan Sugar employs 930 year-round employees and 1,100 seasonal workers. Its annual payroll is $65 million and its annual direct economic impact is estimated at $500 million.

In 2002, growers bought the company. In 2004, Monitor Sugar Company and Michigan Sugar Company merged. The Croswell factory was expanded by 50% a few years ago.

“Today’s announcement is right up there, if not above, any of those events,” Flegenheimer says.

Adam Herford, Chairman of the Cooperative Directors, agrees with Flegenheimer.

“It is really, truly a historic day for our co-op,” Herford says. “As I think back to all that we’ve accomplished as a cooperative, today really ranks right up there as being one of the most significant investments this co-op has made. It’s not only an investment in our factory. It’s also an investment in the future.”

Herford also points out the sustainability of the new venture.

“Making this investment is vital because it allows us to produce up to 80 million more pounds of sugar annually without having to plant another acre of sugar beets,” Herford says. “That makes this story about sustainability. It means 80 million more pounds of sugar without any additional passes over farm fields with our equipment, without any further sprays to our crops to ward off disease and pests, and without burning any additional fuel on our farms to expand operations.”

Michigan Sugar Co. Communications Director Rob Clark says the 2021 harvest began Aug. 16 on nearly 900 grower owners in the Michigan Sugar cooperative. They are estimating this year’s crop could top 5 million tons of sugar beets coming from more than 160,000 acres in 20 Michigan counties and Ontario, Canada.

“There’s a lot of excitement around here and things are about to get even sweeter,” Clark says.

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Read more articles by Kathy Roberts.

Kathy Roberts, a graduate of Central Michigan University, moved to Bay City in 1987 to start a career in the newspaper industry. She was a reporter and editor at the Bay City Times for 15 years before leaving to work at the Bay Area Chamber of Commerce, Covenant HealthCare, and Ohno Design. In 2019, she returned to her storytelling roots as the Managing Editor of Route Bay City. When she’s not editing or writing stories, you can find her reading books, knitting, or visiting the bars of Bay County. You can reach Kathy at editor@RouteBayCity.com